HE has limited legal knowledge and is confused? I hope to God you're not licensed to practice law!
An 'agreement' CAN most certainly constitute a legally binding contract, if it includes the requisite elements such as lawful offer, acceptance and consideration, etc.
Some 'interesting' language also about 'the proper way' to make a contract and the 'difference' between the two...care to share where these nuggets came from?
In short - you are naive about contract law and should do a bit more googling before 'helping' others